Correlation Between Geely Automobile and Greencoat
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Greencoat at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Geely Automobile and Greencoat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Greencoat UK Wind, you can compare the effects of market volatilities on Geely Automobile and Greencoat and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Geely Automobile with a short position of Greencoat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Greencoat.
Diversification Opportunities for Geely Automobile and Greencoat
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Geely and Greencoat is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Greencoat UK Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencoat UK Wind and Geely Automobile is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Geely Automobile Holdings are associated (or correlated) with Greencoat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencoat UK Wind has no effect on the direction of Geely Automobile i.e., Geely Automobile and Greencoat go up and down completely randomly.
Pair Corralation between Geely Automobile and Greencoat
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.0 times more return on investment than Greencoat. However, Geely Automobile Holdings is 1.0 times less risky than Greencoat. It trades about 0.17 of its potential returns per unit of risk. Greencoat UK Wind is currently generating about 0.01 per unit of risk. If you would invest 170.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Geely Automobile Holdings or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Greencoat UK Wind
Performance |
| Timeline |
| Geely Automobile Holdings |
| Greencoat UK Wind |
Geely Automobile and Greencoat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Greencoat
The main advantage of trading using opposite Geely Automobile and Greencoat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Greencoat can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Greencoat will offset losses from the drop in Greencoat's long position.| Geely Automobile vs. Focus Home Interactive | Geely Automobile vs. Haier Smart Home | Geely Automobile vs. Haverty Furniture Companies | Geely Automobile vs. Broadridge Financial Solutions |
| Greencoat vs. Grupo Carso SAB | Greencoat vs. Chesapeake Utilities | Greencoat vs. Geely Automobile Holdings | Greencoat vs. Cars Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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